The City of Terrace is backing an ambitious proposal to connect two of the region’s natural resources — geothermal energy in the form of very hot subsurface water near Lakelse Lake and fibre being turned into pellets at the Skeena Bioenergy plant next door to its sister Skeena Sawmills site on Hwy16 heading west of Terrace.
And it’s doing so by sending letters supporting bids from proposal proponents for financing to both provincial and federal programs for a majority of project costs.
What’s being planned is using heat generated by the hot underground water to warm air which would then be used to dry the fibre being turned into pellets.
Letters from both Skeena Bioenergy and from Kitselas Geothermal, a creation of the Kitselas First Nation with Calgary-based Borealis Energy as a minority shareholder, point to several benefits.
The one major benefit is the prospect of significantly reducing Skeena Bioenergy’s greenhouse gas emissions by using warm air instead of natural gas to provide heat for drying.
“Furthermore, the substitution of natural gas serves to further the long-term competitiveness of Skeena Bioenergy, a benefit to the Terrace community,” reads the letter requesting support from the company to the city.
The project “could [also] serve as the backbone for further geothermal heat distribution to energy customers within the City of Terrace,” adds Kitselas Geothermal’s own letter.
A pipeline from the Lakelse Lake area to Skeena Bioenergy would be used to connect the two. Exact details were not included in the letters.
This would be the second time the city has written a support letter on behalf of Kitselas Geothermal. Last year it provided one supporting the development of a geothermal project in general.
The Lakelse Lake area has long been regarded as having the potential for a viable geothermal project, something Kitselas Geothermal began exploring more in depth in 2014 with drilling following in 2018 on the west side of Lakelse Lake across from the Mount Layton Hotsprings location.
Drilling results suggested there is hot water to at least 150 degrees celsius — a susbstantial amount of heat energy, Borealis chair Tim Thompson reported to city council during a 2020 presentation.
Thompson explained that the Terrace area is atop a region of the Earth’s crust that is being pulled apart which creates fratures in the crust and allows magma to rise closer than normal to the surface, heating subsurface water.
At a cost of $20 million Skeena Bionergy began producing pellets in 2018, using fibre from its sister Skeena Sawmills next door as well as from other sources.
It was the first significant value-added forest industry investment in the area in decades.
The plant’s design and drying processes already produce fewer greenhouse gas emissions in comparison to other pellet plants in the province and beyond.
(With files from Jake Wray.)